How to Make Sense of Plummeting Global Markets
By Neil Irwin

If you look only at the global economy, and what leading forecasters think it will do in 2016, things look to be in a reasonably solid state. The world economy will grow 3.4 percent this year, economists at the International Monetary Fund projected this week, up from 3.1 percent in 2015. Private sector forecasters mostly have similar expectations.

If you look only at global financial markets, it’s Ack! Run for the hills! The sky is falling!

That is to say, global stock, bond and especially commodity markets have, in the first three weeks of the year, swung in ways that suggest this is a perilous time. Their volatility and direction are consistent with the prospect of a new crisis or global recession. (The Standard & Poor’s 500-stock index closed down 1.2 percent Wednesday after dropping more than 3 percent earlier in the day.)

The price of oil is where most of the action is, with West Texas Intermediate Crude trading below $27 a barrel Wednesday, down from around $37 at the end of December, $60 in June and $100 in mid-2014. The broad S.&P. is down 9 percent so far in 2016, and stock indexes in many emerging economies are down even more. Bond and currency markets point to economic troubles in oil-producing nations. (Considering a trip to Quebec? Good move. The Canadian dollar is down 19 percent against the United States dollar since May).

What makes these falling prices unnerving is that it’s hard to tell a simple story about what is driving them. It could be that the markets are moving according to their own internal logic, driven by money managers’ psychology, with their habitual toggle between fear and greed turning back toward the former. More frightening: The markets could be pricing in some darker facts about the outlook for the world that economists don’t fully understand.

In the past, when signals were so negative, there usually was a clearer story to tell.

In the summer and fall of 2011, markets were tumbling on fears that the union using the euro currency would dissolve; in 2008, it was fears that the global financial system would collapse; in 2000 it was on the realization that stock prices, especially for tech companies, had gotten out of line.

The recent market swings are “puzzling,” writes Olivier Blanchard, until recently the chief economist of the International Monetary Fund and now a senior fellow at the Peterson Institute for International Economics. As a general rule, if Mr. Blanchard is puzzled about something involving global economics, you probably should be, too.

China’s once-blockbuster economic growth does seem to have slowed a good deal, though it’s not clear why that should have enormous effects outside China. And the drop in the highly volatile and speculative Chinese stock market is more significant than is reflected by most evidence of what is happening on the ground in the Chinese economy; for example, private surveys of business activity point to only a slight contraction.

Oil prices are down so much that profits of oil companies will suffer mightily, and some will surely go bankrupt. They have already been cutting way back on investment in oil exploration. But traditionally, that has been counterbalanced by celebrations from industrial and transportation companies and from ordinary people over lower bills for gasoline and other forms of fuel.

There’s a more complex story in which global banks are sitting on loans for oil exploration that will go bad, creating losses in the financial sector that could cause a pullback in lending more broadly, a risk described by researchers at the Bank for International Settlements in 2015. In this scenario, loans for oil exploration could be what subprime mortgages were in 2007 — a trigger that reveals bigger problems in the financial system.

One piece of evidence for this theory: Bank stocks have fallen even more in 2016 than the stock market over all, implying that investors believe banks did a little too much oil-field lending, though certainly this won’t amount to the kinds of declines and major troubles of 2008.

Another possibility is that this sell-off reflects the unwinding of “herd” behavior among global asset managers, who piled into similar investments during the 2009 to 2014 stock market rally and are now racing to unload the same high-yield bonds, emerging market stocks and energy investments all at once. In this telling, the moves in market prices reflect more the psychology of money managers than fundamental information about the state of the global economy.

This latter theory is the most optimistic one (and one Mr. Blanchard is particularly sympathetic to, for what that’s worth).

Financial markets are always more volatile than the underlying economy; the stock market has predicted nine of the last five recessions, as an old line often credited to the economist Paul Samuelson has it.

At the same time, sometimes markets know something that smarty-pants economists (or economic writers) don’t. It was certainly true in the fall of 2007, when the stock and bond markets were more prescient about the looming recession in the United States than the consensus view of economists.

The challenge for investors is to determine whether the stock market moves of the last few weeks represent the rational kind of fear or the irrational kind of fear, and we probably won’t know the answer anytime soon.

全球市場為何猛跌 專家也費解

紐約時報報導，三周來全球市場猛跌，最令人緊張不安的是，很難找到一個清楚簡單的理由，不似2000年是科技泡沫迸裂，2008年是全球金融海嘯，2011年是歐元區可能崩解。 國際貨幣基金前首席經濟學家布蘭夏（Olivier Blanchard）寫道，最近市場動盪確實「費解」。

紐時報導，市場重挫，可能是因市場本身根據其內部邏輯而下移，也可能是因資產經理人的心理而下跌，最令人恐懼的是，市場前景可能真的存在一些黑暗真相，導致市場向下調整，而這些真相連經濟學家也不完全理解。

國際貨幣基金預估，2016年全球經濟成長為3.4%，高於2015年的3.1%。然而市場反其道而行，最近3周全球股市、債市、商品市場全面重挫，顯示市場處於危險時刻，且市場的變動和走向，符合新危機和全球衰退又將來臨的徵兆。

油價20日已低於27美元一桶，標準普爾500指數3周來跌掉9%，許多新興經濟體股市跌幅更大。債市、匯市顯示油產國經濟出了狀況。

大陸經濟成長走緩，目前仍不完全清楚為何大陸經濟對大陸以外地區產生如此重大影響。大陸股市也比大陸經濟數字跌得更慘。

油價下滑，一些石油公司篤定破產，至於提供石油探勘貸款的全球銀行可能因此出現虧損，進而普遍抽回銀根，這時石油探勘貸款可能和2007年次級房貸一樣，引發更大問題。3周來，銀行股跌幅大於整體股市，可能肇因於此，但經濟學家不認為這足以演變成類似2008年的金融海嘯危機。

市場賣壓湧現也可能是全球資產經理人所造成，他們同時大賣債券、新興市場股票和能源投資。若是如此，市場僅是反映資產經理人的心理，而非全球經濟的基本面。

有時市場比經濟學家知道得更多，股市下跌經常是經濟衰退的預告，2007年是一例，當時的股市對即將到來的經濟衰退，比經濟學家還先察覺。

原文參照：
http://www.nytimes.com/2016/01/21/upshot/how-to-make-sense-of-plummeting-global-markets.html

紐約時報中文版翻譯：
http://cn.nytimes.com/business/20160121/c21up-stocks/zh-hant/

2016-01-22．聯合報．A17．國際．編譯王麗娟